Question

As the general population has aged, there has been an increase in the number of nursing homes, community health facilities along with the development of home care facilities. All of these factors have produced an increase in the demand for nurses. Simultaneously, improved job opportunities for women other fields have reduced the supply of nurses. Despite these factors, hospitals, the major employers of nurses, have resisted wage increases. The resulting situation can be described as

a.	a non-binding wage ceiling problem.
	b.	a wage floor problem.
	c.	a shortage of nurses.
	d.	a surplus of nurses.

Answer 1

Option C - a shortage of nurses

Since the demand for nurses has increased than before and the supply of nurses has decreased than before, the new equilibrium wage rate of nurses would ideally be higher than the previous wage rate. But, since hospital, the major employers of nurses, have resisted wage increases, the wage rate is lower than what would have been the actual wage rate. This would lead to a shortage of nurses at the lower wage rate.